Health insurance providers looking to expand their operations internationally have been looking to Africa for potential opportunities. The latest news to come from this region refers to two health insurance powerhouses, InterGlobal and UnitedHealthcare International, a UnitedHealth Group business.
InterGlobal has established a new partnership with the insurance broker SATIB, which operates primarily in the Southern Africa region, to assist in designing and creating Aloe Healthcare Insurance plans. These plans aim to meet the special and unique requirements of companies working in Africa’s tourism industry, and will be marketed by SATIB while being underwritten and administered by InterGlobal.
The first of Now Health International’s (NHI) twice-yearly premium adjustments was made on February 1 and saw relatively average increases of about 5% and 6% across most of the countries that the insurance company operates in.
However, there were a few countries, including Bahrain, Oman, Qatar and The United Arab Emirates, that saw increases as high as 8%. The second round of increases will take place in August, and, if medical inflation rates continue on a similar trajectory, the total annual increase for NHI’s premiums could reach up to 16%. This is a much higher figure than last year, which saw average rates of increases at about 10% and is also a much higher figure than the previous global rate of inflation for medical costs, also at 10%.
Coverage from top insurers, such as Cigna, can often involve high premiums as benefits are generous and the levels of servicing offered are of the highest quality. The “Global Health Options” (GHO) issued by Cigna roughly one year ago was aimed at such clients looking for high quality health insurance. Now, Cigna is aiming to provide health insurance that will appeal to clients who may not be able to afford high end plan premiums and have launched their latest product, the GHO “Advance”. The benefits of this plan have been reduced slightly, but the premium is much more appealing while still incorporating the level of service that is normally associated with Cigna.
Health insurance companies were busy last year in regard to charity donations in recent months. One company in particular hit a record high amount and in 2012, William Russell raised more than USD $15,750 for Woking Hospice in a goal that saw involvement from directors, staff and clients.
This impressive amount is much more than what has been recorded in years previous, even doubling the amount raised in 2011. William Russell was able to reach this amount from various fundraising activities, which included incorporating dress down days, raffles and sweepstakes.
In 1903, the life expectancy of the average man in the United States was 50; for a woman, 55. Fast forward one hundred years to 2013 – now, most of us are expected to live until 80, and plenty of people remain happy and healthy into their 90s. As medical technology advances, we will surely continue to live longer and longer lives, but with this increase in life expectancy comes one major concern – how can the United States manage the health care costs of a rapidly aging population? Read more
2012 saw the best financial results for international medical insurer William Russell, with a 30 percent increase in business from the previous year. The opening of a new sales support office in Hong Kong has also enabled the insurer to reach more clients in Asia, and ensures better service and support. Read more
William Russell has announced a new campaign for 2013 that is designed to combat trends of excessive premium inflation in the UAE. The international insurance provider has decided to offer increased flexibility to its clients when they make a choice on their medical network options and prices. Cheaper provider networks will soon be available for clients who are looking for a chance to manage existing claims costs at their own discretion, and based on their needs or situation at the time.
Read the rest of the William Russell & Medical insurance UAE article
Leading international health insurance provider, IHI Bupa recently announced their premium increases for 2013, which have come in at the lowest percentage increase recorded by the company in five years. This tapering off of increasing health insurance premiums is a trend that seems to be occurring across the health insurance industry. Globalsurance, one of the largest distributors of IHI Bupa plans, has seen many other providers offering premiums that are slowing down in their rate of increase and believes this is likely due to falling medical inflation worldwide.
For more than 30 years, IHI Bupa has been a leading provider of international health insurance policies for expatriates and high-net worth individuals all over the world. Distributors and customers all tout IHI Bupa to be one of the best in the industry, and the company has formed an especially strong presence in Asia. Their policies include coverage in all parts of the world, including in the USA and are guaranteed renewable for life, an option that other providers are often apprehensive about offering.
One of the signs that Dubai is continuing to show recovery after the 2008 Financial Crisis is through the growing health insurance industry. Many of the leading health insurance providers in the region are all reporting increasing numbers of insurance quotes and information requests from people interested in obtaining medical insurance.
Globalsurance continues to expand its services and operations in the region, attributing the influx to more and more inquiries from new clients and expatriates that are relocating to Dubai.
Tim Slee, Global Sales Director for Bupa International commented on this growth: “There is an exciting new level of increased activity across the Middle East, this increased interest has led to a strong conversion rate of international medical insurance sales in the UAE.” Bupa International has seen encouraging performances and maintains a strong presence in the region because of the diversified products they offer with their cooperation with Globalsurance.
Globalsurance continues to see differing indications of the state of the health insurance industry in China. Most analysts concur that the country’s high-income earning population are not likely to buy comprehensive health insurance in the short term. Many of the health insurance companies that have invested in developing on-shore solutions for health coverage continue to see varied results. While some insurers are re-figuring their China strategy, others continue to develop new products to further test the market.
Earlier this month and after little success, ICBC AXA eliminated its ‘China Executive Plan’ that was launched in December 2011 and targeted high-income Chinese nationals. The ‘China Executive Plan’ featured benefits that were below more typical expatriate policies but higher than domestic Chinese policies. One particular point of interest was that the plan had options for covering preexisting conditions, an option readily available with many health insurance policies.Read the rest of the China’s Emerging Wealth not Buying Medical Insurance as Expected article.
Cigna is in a strong position to see growth in its international and commercial healthcare coverage, according to BMO Capital, a financial services company that provides clients from businesses and government’s access to a wide variety of services and products. BMO believes that some of the most important parts of the health insurance providers business are also strengthening.
Furthermore, the company’s stock prices are also projected to increase, as analyst Dave Shove increased his 12-month anticipation for the price of the company’s stock from USD $60 to $65.
Earlier this month at its annual investor day presentation, Cigna Corp released their projections for 2013, with adjusted earnings of about USD $5.80 to $6.25 per share. These figures are lower and more conservative than average expectations from other analysts, which set expectations at about USD $6.33 on average, according to FactSet, a multinational financial data and software company.
Globalsurance continues to witness the falling rates of global health insurance inflation in the high-end sector, typically referred to as International Private Medical Insurance (iPMI). Average rates of inflation per year have typically hovered at around 11% over the past 5 years, but this year, AXA PPP has published an annual increase of just 8%.
As a key player in the health insurance sector, AXA PPP has the competitive advantage of being one of the largest and longest-running insurers in the world and they set a standard for different areas in the industry, including international health insurance inflation rates. One of the most influential factors for determining the cost of health insurance premiums is the cost of claims, and with that, the increase in premiums is typically a good indicator for the monetary changes in the cost of care and treatment.
President Obama meets today with both Myanmar’s party leaders in Rangoon, the country’s commercial centre. It will be the first official visit for a sitting US President to Myanmar (also known as Burma) in an effort to support recent reforms undertaken by its President Thein Sein. Obama has revealed a strategy that ‘re-focuses on engaging fast-growing Asian nations’, choosing South East Asia as his first destination since his re-election as Head of State.
From the 21st of December 2012 European insurers will no longer be able to use gender as criteria when assessing risk factors to price premium plans. The European Court of Justice ruled a decision in March 2011 determining that insurance policies reliant on gender factors were incompatible with the prohibition of discrimination under the European Union. The final Article prohibits:
“…any results whereby differences arise in individuals’ premiums and benefits due to the use of gender as a factor in the calculation of premiums and benefits.”
Initial plans for the Gender Directive began in 2004, with the goal to enforce equality for men and women when accessing goods and services. The Directive would dismiss the use of actuarial factors related to sex when insurance companies determined the provision of insurance to clients. Individual plans could no longer be calculated using gender as a factor. Despite the campaign, the court ruled that insurance companies could continue to identify sex as a determining factor when defining differences between premiums and benefits.
November 8th marked the official re-branding of the AXA Minmetals Ultracare International Medical Insurance Plan in China with a new, updated name, ICBC AXA Ultracare. The move comes after the shift in the majority shareholding from Minmetals to ICBC.
This change is only one of a few to have occurred in regard to the ICBC medical plan in China. Globalsurance CEO, Neil Raymond notes that these modifications are definitely steps in the right direction; “The ICBC AXA plan was the first true global health plan in China to be onshore and licensed, initially with RSA, then Minmetals and now finally ICBC. During this transition the plan has had its ups and downs but we feel very positive about the current changes,” he said.
Some of the other changes that have taken effect refer to plan benefits and premiums. These changes are seen as a positive shift by analysts at Globalsurance, and they maintain optimistic outlooks that this plan will continue to perform well.
Globalsurance, with great excitement, can announce that as of November 1st 2012, Allianz Worldwide Care individual premiums will increase by just 5 percent. This increase rate is all the more impressive when put into context with the 11 percent global average increase over the past 5 years across the Private Medical Insurance sector.
Despite bleak global economic outlooks and rising inflation, Allianz has remained successful in the iPMI sector and in the last five years their average increase has come in at only 8 percent as highlighted within Globalsurance’s latest Insurance Review.
Globalsurance can confirm that Bupa International’s medical inflation rate has come in below long term average which is good news for clients. Global medical inflation in the international Private Medical insurance (iPMI) market has been running at 10.8 percent on average for the past 5 years so although Bupa’s increase looks high by most inflation measures, it is actually typical within the iPMI sector.
Bupa International is unique as an insurer in that it has a bi-annual premium rate increase for individual international private health insurance policies and it changes its premiums twice per year – on the 1st of April and the 1st October. Earlier this year, Bupa adjusted its premiums by 6 percent and then by 4.3 percent this October meaning an effective rate of yearly medical inflation of 10.3 percent.
These changes relate to all of the company’s Worldwide Health Options (WHO) and Lifeline health insurance products.
AETNA is one of the latest insurers to reveal the new pricing points for their range of International Private Medical Insurance (IPMI) products. Together with BUPA, AETNA has also revealed an increase in the cost of its IPMI plans; with both companies providing similar adjustments levels (10% Aetna, 10.3% Bupa) that match the current global medical inflation trends and compensate for the increasing costs of medical treatment at major international hospitals.
Customers who have purchased plans after October 1st 2012, or who will be renewing their policies after that date will have the adjusted premiums placed on their policy.
While the increase of 10 percent may seem steep, it is important to realize that this is actually lower than AETNA’s 5 year average 11.9 percent premium inflation rate; and is only higher than the increases the company placed on its premiums in 2010 and 2012 which were 9.9 and 8.2 percent respectively.
However, outside of the normal yearly adjustment of plan premiums in relation to heightened levels of global medical inflation AETNA has taken some welcome steps to provide more comprehensive protection to policyholders and their families.
Starting with the inclusion of Traditional Chinese Medicine benefits in the prescribed under both Inpatient and Outpatient medication Coverage, in addition to offering rehabilitation protection under those same benefits, AETNA has drastically improved its maternity package by including expanded coverage for a range of maternity and infant related treatments.
Under AETNA plans, as of October 1st, they have extended the maternity coverage under the complications of pregnancy benefit where they will now offer post-natal check-ups for 6 weeks after the complicated birth. Furthermore, keeping with the family friendly developments, AETNA plans are now able to provide coverage for congenital anomalies in an infant up until the child has reached 12 months of age.
In a clear sign that the company is intending to attract more business from expatriate families around the world, AETNA has also improved the protection offered to dependents who are not infants by enabling coverage up until the age of 18 if the dependent is living with the policyholder, or up until the age of 26 if the dependent is enrolled in full time education.
Continuing the changes are a number of considerations which will enable even further flexibility to policyholders with an AETNA plan, including an extension of the claim submission deadline to 180 days after treatment – allowing for more give in relation to customer’s lives. However, AETNA plans will now limit Accidental Dental Treatment to one visit within 30 days of the initial accident or treatment which warranted the Dental care.
AETNA, which took over international insurance company Goodhealth, has shown with the update of its coverage offerings that it is committed to providing exceptional levels of protection to foreign nationals, and their families, whom are located around the world. While the average premium increase may, initially, seem high, the inclusion of a range of more innovative and comprehensive coverage should see the company well positioned to see success for the remainder of the year.
Reliance Life Insurance, India’s largest private insurance company, has announced that they will be going through with an expansionary move that will see over 55,000 staff added to their force. This move is in anticipation to its future plans to move into different marketing channels.
Reliance Life Insurance is a business unit of Reliance Capital and led by Anil Ambani. Despite being one of India’s larger life insurance companies, Reliance only controls a staggering 5 percent market share. The reason for this is due to the LIC – the Life Insurance Company of India. The LIC is a government-controlled corporation which dominates the market, consuming 70 percent of the market. Reliance’s aim is to become the main alternative to the LIC.
Currently, Reliance is recruiting over 55,000 agents to join its sales force. However, not all agents will be on a commission basis – roughly 5,500 agents will be admitted to full time status with a base salary, in addition to incentives for performance, such as commissions. The rest of the hiring, over 50,000 agents, will be on a purely commission basis.
Reliance is seeking to bolster its workforce to 150,000 by the end of the current financial year, up from 120,000 which it has now. The company experiences high turnover due to the nature of the business – it is vastly pure commission so the stability of income and performance of individuals forces them to leave the business. As such, Reliance sees high attrition rates, which it hopes will not be the case with the 5,500 that they are hiring full time.
This increase in agents is aimed at replacing the 30,000 agents that left the firm during the April – June 2012 quarter. In addition, it appears that the move is in anticipation for a strategic business move that it is making.
Reliance Life Insurance is in talks with many banks in both the public and private sectors, seeking to add its products into the banks offerings. They are looking to get into bancassurance, which is a form of distribution for insurance companies by way of distributing insurance products through banks (also known as a bank insurance model or BIM).
Alternatively, Reliance can distribute its insurance products via its own agents, which it has been doing so historically. This business model is known as a tradition insurance model (TIM) whereas Reliance’s new strategy is known as a Hybrid Insurance Model.
Reliance Life Insurance’s latest move is an attempt to gain more traction in the market space not taken up by the government-run LIC. Excluding the LIC, there are 20 firms competing for 30 percent of the market share and 5 percent belongs to Reliance. Competing with Reliance are companies such as SBI Life, Metlife, ICICI Prudential, Bajaj Allianz, Max New York, and Sahara Life. Much of Reliance’s business originates from the rural markets, including over 34 percent of its new business. Moreover, Malay Ghosh, President and Executive Director of Reliance Insurance, stated that only 15 percent of the company’s business is from Tier-1 cities. With that in mind, Reliance’s new approach via bancassurance channels should allow Reliance to gain more momentum and volume throughout Tier-1 cities.
However, with Reliance’s late entry into the bankassurance market, the availability of suitable and preferred partners is low due to existing contracts and relationships in place. Reliance is in talks with many different banks, including some banks in the public sector. Currently, the Insurance Regulatory and Development Authority has regulations whereby every bank can only represent one partner for selling insurance products. To negate this reality, Reliance may be offering a small equity stake of up to five percent for banks who choose to partner with them. This incentive represents a large investment as Reliance Life has over Rs. 18,700 crore ($3.36 billion USD) assets under management and the company itself has a valuation of Rs. 11,500 crore ($2.06 billion USD).
This move by Reliance represents a significant decision with regards to its long term strategy. To be offering up to 5 percent to incentivize a partnership, Reliance is willing to further dilute its current shareholder percentages through this new direction. This isn’t the first time that Reliance had given up equity for a significant partnership.
In addition to the expansion in to bancassurance, Reliance is looking to facilitate more market penetration by its business partner Nippon Life. Official since October 2011, Nippon had acquired a 26 percent stake in Reliance for Rs. 3062 crore (US$ 551 million) and this investment represents Nippon’s faith and commitment to the Indian market. Reliance Capital, the parent company of Reliance Life Insurance, wants Nippon to bring its AUM products to the Indian market. Nippon has over US$600 billion in its management but very few of those assets are in India. Reliance is aiming to bring their assets into India in order to gain a higher market share.
Over 60 percent of Reliance’s policies are sold through their strong workforce. Their distribution networks include brokers, corporate agents, and commission-based agents. With the inclusion of their bank network, it is unsure whether their commission force will suffer due to the introduction of the new channel. Since it represents such a large percentage of business and commitment from the company, Reliance will need to be careful in how it deploys its bancassurance in a way that it doesn’t cannibalize or encroach on the commissioned agent’s territory.
Filed Under Aetna, Africa, Allianz, Asia, AXA PPP, BUPA, China, China insurance, DKV, Europe, Expat Insurance, Health Insurance, Hong Kong, IHI Bupa, Insurance Company, International Healthcare, Medical Insurance, Middle East, Philippines, UAE Insurance, United Kingdom | 9 Comments
In this article we will first present our findings of the premium increases and premium inflation rates in each region and country we studied, with specific insurance findings to be presented at the end. Overall our findings were that International Private Medical Insurance (iPMI) premium inflation was very high, at roughly 10.8 percent per year over a 5 year average. While variations exist between countries, the reality is that iPMI inflation rates were extremely consistent throughout the world. However, it is important to note that this is medical insurance premium inflation at the high end of the sector, and not necessarily with regards to the mass market.
Even presenting the argument that premium increases are fairly consistent on a global basis, there are some immediate outliers – Hong Kong, for example, runs at an iPMI premium inflation rate of roughly 13 percent per year, while Kenya’s premium inflation rate is approximately 9 percent per year. Although there is a difference in premium inflation rates between Hong Kong and Kenya, the difference is not overly substantial – as will be seen inside this report.
Globalsurance is pleased to reveal the results of our latest study on the international health insurance industry and rates of international medical insurance inflation around the world as of August 1st 2012.
Using 7,916 data points from 8 different International Private Medical Insurance providers in 10 different countries, Globalsurance has been able to successfully identify a number of trends within Global Medical Inflation for individual International Private Medical Insurance (iPMI) plans during the time period from 2008 to 2012. iPMI is a subsector of the greater health insurance industry which services the global population of expatriates and international High Net-Worth individuals.
The companies sampled in the studies use Age and Geographical Area of Coverage as the main variables in their premium calculations. By selecting a sample which is community rated Globalsurance has been able to efficiently identify the actual rates for premium increases in different parts of the world. Our measure of inflation is based on a sample of policies, ages, and published rates for each insurer included in the study. Globalsurance selected the most common age groups and most common policy types for our data points to achieve realistic measurements in relation to medical insurance premium inflation around the world.
While individual insurance providers and underwriters may disagree with our findings, the figures represented in this report are based on our sample and present baseline figures for all of the regions and companies we chose to consider.
It is important to note that, unlike the recent Towers Watson Report on Medical Trends, the data contained in the Globalsurance insurance review is not survey based. Rather than looking at individual responses and feelings in reference to levels of health insurance premium inflation, which may have some inherent bias dependent on the respondent, Globalsurance is analyzing the actual premium data from insurance companies with exposure to the world at large, over locally based providers operating in a single country.
Additionally, we have analyzed premium data, and not healthcare pricing data. Consequently the figures represented in this report are indicative of the levels of healthcare cost inflation which insurance perceive to be in place in the locations we sampled; profit and operating costs of the individual insurers are assumed to be unchanged. While the increase or decrease in premium values may point to actual rates of medical inflation in the countries which were included in the study they do, in fact, represent the increased costs placed on policyholders.
However, it should be noted that, while the figures contained in this report are the actual rates of iPMI premium increases for the duration of the study, the removal of Age and Policy type means that the figures presented in this study of International Medical Insurance premium inflation can be used as a suitable proxy for rates of actual medical inflation in relation to healthcare costs around the world. It should be noted that the proxy does not represent medical inflation across the entire healthcare sector within a country or region; for example, NHS cost increases in the United Kingdom are not evident in our findings. The rates of iPMI premium inflation are only a proxy for healthcare costs in High-End, private medical facilities in the countries which we considered, due to the basic nature of the international medical insurance products we are studying.
So, without any further ado, here is the Globalsurance International Insurance Review: